Delaware Payroll Tax Guide (2026)

Delaware taxes wages from 2.20% to 6.60% after a zero bracket on the first $2,000, charges unemployment assessments on the first $14,500 of pay in 2026 after a jump from $12,500, and now collects Paid Leave contributions of up to 0.8% that employers may split evenly with employees.^[3]

10 min read • Reviewed by Rajanikant Patel CPA • Verified Oct 1, 2026 • Sources: DOR, DDOL, IRS

Quick Facts

Delaware payroll at a glance

Delaware employers manage three state payroll taxes: graduated income tax withholding taken from employees, unemployment assessments paid by employers, and a paid leave contribution that employers owe but may split with staff.^[3]

State income tax withholding

2.20%–6.60% ^[1]

UI taxable wage base

$14,500 per employee ^[3]

New employer UI rate

1.00% ^[3]

Experienced UI rate range

0.30%–5.40% ^[3]

Delaware Paid Leave employee share, withheld from employee

0.40%, $184,500 ^[8]

Delaware Paid Leave, employers with 25 or more employees

0.80% ^[9]

Social Security wage base

$184,500 ^[2]

FUTA net rate

0.6% = $42 per employee ^[14]

State minimum wage

$15.00 per hour ^[10]

Local minimum wage ordinances

None ^[10]

UI registration trigger

Paying wages of $1,500 or more in any calendar quarter, or employing at… ^[3]

Exempt salary threshold

$35,568 per year ^[13]

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What changed for Delaware payroll in 2026

Five items moved for Delaware employers this year. Anything below is what have changed since the 2025 tables, so a rate card carried over from last year will be wrong in at least one place.

UI wage base up to $14,500 New employer rate cut to 1.0% Paid Leave claims opened Jan 1 Op and Tech shown separately Delinquent rate down to 6.3%

Paid Leave is the employer’s bill, not the employee’s: Delaware makes the employer legally responsible for 100% of the Paid Leave contribution and only permits recovering up to half from employees. Deductions may be taken for the current pay period only, so there is no way to catch up on a quarter you failed to withhold. Miss the setup and the business absorbs the full 0.8% on every dollar of covered wages.

Estimate

2026 Delaware payroll tax calculator

Enter one employee’s annual gross wages to see what the employer owes, what comes out of the paycheque, and the true cost of employment.

Delaware · 2026 rates · per employee, per calendar year

Annual gross wages ($)

Cash wages subject to payroll tax, before any withholding.

Your UI contribution rate

Your exact rate comes from Delaware Department of Labor, Division of Unemployment Insurance each year.

Custom UI rate (%)

FUTA basis

FUTA is 6.0% less a 5.4% credit where the state has no outstanding federal loan.

Employer pays

UI, on first $14,500–

Delaware Paid Leave, employers with 25 or more employees, on first $184,500–

Delaware Paid Leave, employers with 10 to 24 employees, on first $184,500–

Operations and Technology assessment, on all wages–

FUTA, on first $7,000–

Social Security, 6.2%–

Medicare, 1.45%–

Employer payroll tax–

Withheld from the employee

Delaware Paid Leave employee share, 0.4%, to $184,500–

Social Security, 6.2%–

Medicare, 1.45%–

Additional Medicare, 0.9% over $200,000–

Withheld from employee–

True cost of employment–

Employer tax as % of wages–

Total payroll tax, both sides–

State income tax withholding is not included above: it depends on the employee’s Federal Form W-4, Form W-4A or Delaware Form SD/W4A; Form W-4NR for nonresidents and filing status, so it cannot be estimated from gross pay alone.

Rates & Nexus

Payroll tax rates & the nexus question

Delaware runs 6 state payroll taxes. The table below is the whole state layer for 2026.^[3]

The state payroll taxes

Tax	Paid by	2026 rate	Wage base
UI	Employer	0.30%–5.40%; 1.00% new	$14,500
Delaware Paid Leave, employers with 25 or more employees	Employer	0.80%	$184,500
Delaware Paid Leave, employers with 10 to 24 employees	Employer	0.32%	$184,500
Operations and Technology assessment	Employer	0.20%	All wages
Delaware Paid Leave employee share	Employee	0.40%	$184,500
Income tax withholding	Employee	2.20%–6.60%	No limit

The 2026 table sets the new employer rate and the new construction rate both at 1.0%, the delinquent employer rate at 6.3%, and the average high cost multiple at 0.95. The taxable wage base is set by the Delaware legislature against a federally determined minimum.^[3]

Who has to register

Paying wages of $1,500 or more in any calendar quarter, or employing at least one person for some portion of a day in each of 20 different calendar weeks, in the current or preceding year. Agricultural employers use $20,000 in a quarter or 10 workers in 20 weeks, and domestic employers use $1,000 in a year. Register on Form UC-1, Report to Determine Liability.^[3] Income tax withholding is administered separately by Delaware Division of Revenue, so most employers end up with two state account numbers, not one.

Multistate and remote employees

When an employee works in more than one state, the four-part test below decides which state the wages are reported to. The tests run in order: you stop at the first one that gives an answer.

1. Localisation of service→
2. Base of operations→
3. Place of direction & control→
4. Employee’s residence

One remote employee is usually enough. A single person working from home in Delaware generally creates an obligation to register and report wages here, even if the business has no office, property or customers in the state.

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Compliance

Registration & return filing

Registration is online and free. The unemployment account and, where one exists, the withholding account are opened separately and carry different numbers.^[3]

How to register

Cross the wage threshold→
Delaware Online Employer Services Portal at oes.delawareworks.com→
Receive account number→
File & deposit online

Deposit schedule

Set from a July 1 to June 30 look back: $6,020 or less files quarterly, $6,020.01 through $33,460 files monthly, and above $33,460 files eighth monthly on periods ending the 3rd, 7th, 11th, 15th, 19th, 22nd, 25th and last day of each month.^[1]

Returns, reports & due dates

Form	What it is	Due
Form UC-8 Employer’s Quarterly Tax Report with Form UC-8A quarterly payroll report	Quarterly unemployment return	April 30, July 31, October 31, January 31
Form W-1Q for quarterly filers, Form W-1 for monthly filers, Form W-1A for eighth…	Income tax withholding returns	Set from a July 1 to June 30 look back: $6,020 or less files quart
Annual reconciliation	Year-end withholding reconciliation	January 31
Form 941	Federal quarterly return	Last day of the month after quarter end
Form 940	Federal unemployment, annual	January 31
New hire report	Report of newly hired employees	Within 20 days of start date

Quarterly unemployment returns are due April 30, July 31, October 31, January 31. A return filed one day late is delinquent, and in most states the penalty attaches to the return, not the payment.^[3]

Pricing

Payroll Pricing

Simple, transparent pricing, no setup fees, no year-end surprises. One flat charge per pay run.

Your Biweekly Payroll Statement

Line items the big providers quietly bill for

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CROWNGLOBE

Setup fee

one-time onboarding

billed
extra

Every payroll run

each pay cycle

billed
extra

Off-cycle payroll

corrections & bonuses

billed
extra

Year-end filings

W-2s, 1099s & more

billed
extra

All you actually pay

Per employee, per pay run

$6 /emp

Plus a flat $40 minimum per pay run. That’s the whole bill.

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Wage Base

Subject wages vs. exempt payments

Not every dollar an employee receives is a taxable wage. The split below governs what goes into the unemployment wage base and what is reported at year end.^[3]

Subject wages

Salaries, hourly pay, overtime and piece rates
Commissions, bonuses and incentive pay
Most cash tips reported by the employee
Vacation, holiday and paid sick leave when taken as wages
Severance and payments in lieu of notice
The cash value of meals and lodging provided as compensation
Employer contributions to a non-qualified deferred compensation plan
Wages subject to the employee-paid contributions listed above

Not subject

Reimbursements of genuine business expenses under an accountable plan
Employer contributions to a qualified retirement plan
Employer-paid premiums for accident and health insurance
Most third-party sick pay after the sixth calendar month
Payments to a genuine independent contractor
Workers compensation benefits

The wage base is per employer, per year, not per job. If you hire someone in August who already earned $14,500 elsewhere, your unemployment clock still starts at zero. The one exception is a successor employer taking over an existing payroll, who inherits the wages already paid.

Reference

Glossary of key terms

Taxable wage base: The slice of each employee’s annual pay that unemployment tax is calculated on. In Delaware that is $14,500 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
Delaware Paid Leave employee share: An employee-funded contribution withheld from pay at 0.40%. It is the employee’s money, so it is withheld rather than paid by the employer, but the employer is responsible for remitting it.
Experience rating: The method Delaware Department of Labor, Division of Unemployment Insurance uses to set each employer’s own unemployment rate from its history of claims. Employers with fewer charged claims move down the schedule; those with more move up.
New employer rate: The rate assigned before an employer has enough history to be experience rated. It normally applies for two to three years, then the account moves onto the experience schedule.
Federal Form W-4, Form W-4A or Delaware Form SD/W4A; Form W-4NR for nonresidents: The state withholding certificate. It sets how much income tax comes out of each cheque and is filed with the employer, not with Delaware Division of Revenue.
Reserve account: The running balance of contributions an employer has paid in, less the benefits charged against it. The ratio of that balance to taxable payroll is what drives the assigned rate.
Successor employer: A business that acquires another’s payroll may inherit both its experience rate and the wages already paid toward the wage base for the year. Getting this wrong is a common acquisition error.
Localisation of service: The first of four tests deciding which state a multistate employee’s wages are reported to. If substantially all the work is in one state, that state wins and the remaining tests are never reached.
FUTA credit reduction: A reduction in the 5.4% federal unemployment credit applied to states that have carried an outstanding federal loan for two or more consecutive Januaries. It raises the effective FUTA rate and is settled each November.
Supplemental wages: Bonuses, commissions, awards and similar payments made outside the regular payroll cycle. Many states set a separate flat withholding rate for them.
Local withholding: Income or occupational tax levied by a city, county or school district and withheld by the employer alongside state tax. It is assessed separately from the state layer.

Federal, State & Local

Delaware payroll tax, layer by layer

Federal tax applies everywhere and is the larger number. The state layer is what changes when you cross a border.

Layer 1: Federal

Tax	Rate	2026 base
Social Security	6.2% each side	$184,500
Medicare	1.45% each side	No limit
Additional Medicare	0.9% employee only	Over $200,000
FUTA, standard	0.6% net	$7,000
Federal income tax	Per Form W-4	No limit

Delaware has no FUTA credit reduction for 2026, so the standard 0.6% net rate applies, $42 per employee. The final list is not published until 10 November 2026.^[14]

Layer 2: State

Tax	Rate	2026 base
UI, new employer	1.00%	$14,500
UI, experienced	0.30%–5.40%	$14,500
Delaware Paid Leave, employers with 25 or more employees	0.80%	$184,500
Delaware Paid Leave, employers with 10 to 24 employees	0.32%	$184,500
Operations and Technology assessment	0.20%	All wages
Delaware Paid Leave employee share, employee	0.40%	$184,500
Income tax, standard	2.20%–6.60%	No limit

Layer 3, county & city: a real third layer

The City of Wilmington levies a 1.25% wage tax on the gross earned income of city residents and on the gross earned income of nonresidents who work inside city limits. Employers collect it alongside state withholding and file annual reconciliations and W-2 data with the city Earned Income Tax Division. No other Delaware municipality imposes a wage tax.^[11]

The state minimum wage is $15.00 an hour, effective 2025-01-01. The tipped cash wage is $2.23. No local ordinance sets a higher floor. No Delaware municipality sets its own minimum wage. The tipped cash wage of $2.23 has been fixed for years, so the tip credit widens automatically whenever the state rate rises.^[10]

Overtime exemption is a separate test. A salaried employee is exempt from overtime only above $35,568 a year ($684.00 a week) federal FLSA standard salary level, and only if the duties test is also met. Paying a salary is not by itself enough.^[13]

FAQ

Delaware payroll FAQs

Delaware taxes the first $2,000 of taxable income at zero, then applies 2.2% to $5,000, 3.9% to $10,000, 4.8% to $20,000, 5.2% to $25,000, 5.55% to $60,000 and 6.6% above that. Employees supply a federal Form W-4, Form W-4A or Delaware Form SD/W4A, and nonresidents use Form W-4NR.

Your schedule comes from a July 1 to June 30 look back. Liability of $6,020 or less files quarterly on Form W-1Q, $6,020.01 through $33,460 files monthly on Form W-1, and anything above $33,460 files eighth monthly on Form W-1A. Eighth monthly periods end on the 3rd, 7th, 11th, 15th, 19th, 22nd, 25th and last day of the month, with payment due within three business days.

Experience rated employers fall between 0.3% and 5.4% on the first $14,500 of each worker’s wages, which is up from a $12,500 base in 2025. New employers, including new construction employers, pay 1.0%, and delinquent employers are assessed 6.3%. Quarterly Forms UC-8 and UC-8A are due April 30, July 31, October 31 and January 31.

Payroll deductions began January 1, 2025 and employees started filing claims January 1, 2026. Employers with 25 or more employees contribute 0.8% of covered wages, made up of 0.32% parental, 0.40% medical and 0.08% family caregiving. Employers with 10 to 24 employees owe only the 0.32% parental component, and employers with nine or fewer are not required to participate.

Up to half the program cost, which works out to a maximum of 0.40% where all three coverages apply and 0.16% for parental leave only. Covered wages stop at the same annual maximum used for Social Security taxes. Deductions may only be taken for the current pay period, so you cannot go back and recover a missed quarter.

Yes. Wilmington charges 1.25% on the gross earned income of city residents and on the earned income of nonresidents who work inside city limits. Employers withhold it alongside state income tax and file annual reconciliation and W-2 information with the city. No other Delaware city imposes a wage tax.

$14,500 per employee per calendar year. Once an employee reaches that in wages from you, no further unemployment tax is due on that employee for the rest of the year. The count restarts on 1 January and does not carry over from a previous employer.

$15.00 an hour. No local ordinance sets a higher rate. The tipped cash wage is $2.23.

April 30, July 31, October 31, January 31. A return is delinquent the day after the deadline even if the tax itself was paid on time, so file the return whether or not you can pay.

Verification

Sources & methodology

Methodology: every rate, threshold and due date on this page was taken from the administering agency’s own published material for the 2026 tax year, checked on Oct 1, 2026. Where a federal figure applies it comes from the IRS, SSA or US Department of Labor. 7 data points on this page could not be confirmed against a primary source and are either omitted or marked as not published, rather than estimated. Rates change, and some change mid-year, so confirm against your own rate notice before running a payroll.

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